Viewing blog posts written by Gino DiCaro

'Green' countertop manufacturer's inability to compete in CA keeping it from investment cash

California manufacturers can barely compete domestically and globally. This goes for our 'greenest' producers as well. This was underscored today in a San Francisco Business times article by Lindsay Riddell.

Riddell explained a developing story on Richmond-based Vetrazzo -- a manufacturer that makes sustainable countertops from recycled glass.

It looks like the 22-employee Vetrazzo would like to grow in California but investors won't pony up the $2 million cash unless they move to where they can compete.

The California Air Resources Board (CARB) is looking to finalize its "Cool Cars" policy this Thursday, once again putting regulation before reason and imposing knee jerk command-and-control mandates with no regard for economic impacts and, in this case, public safety.

**** Since this blog was written I have been corrected by CARB that it is not on the agenda for Thursday. But no doubt folks are still showing up to testify in the public comment period on the issue *****

Here's the nickel tour:

CARB's "Cool Cars" policy was set up in 2009 as an AB 32 early action item to reduce the state’s greenhouse gas emissions by reflecting heat away from cars, thereby requiring less air conditioning and less fuel.

CARB originally tried to ban dark colored vehicles. That didn't fly with the public, auto dealers, manufacturers and anyone else who breathes in California. Whew.

CARB then focused on a policy that mandated a reflective layer in all car windshields by 2012 and all windows by 2016. They did this before any analysis on economic or safety impacts and without regard for alternatives with similar emission reductions.

Policies like this require extensive research to ensure proper benefit with the least amount of economic burden. Over the past few months important information and data on these two fronts has emerged from the Wireless Association and the Auto Alliance that prove that the proposed "Cool Cars" policy creates:

A substantial economic burden (costs 2 and a half times more than CARB reported)

A serious concern about public safety because of negative effects on GPS ankle mechanisms and less cell phone 911 call completion

Overall administrative nightmares for any system using toll road and bridge transponders

Even when presented with these problems and new information on better alternatives, CARB is still unwilling to budge and provide any flexibility or necessary changes in the regulation.

The ultimate absurdity of "Cool Cars" is that the policy discourages new green tech and innovation in our automobiles. Solar absorptive technology incorporated in windshields is an alternative approach and is 90 percent as effective in reducing the build-up of heat in a vehicle. This technology has none of the negative outcomes of the proposed "Cool Cars" regulations. Further, there is a decent chance this less costly and more efficient technology (along with other alternatives) could be adopted nationally or semi-nationally, meaning larger emission reductions countrywide.

CARB in the end wants it one way. Their way. CARB is going it alone, ignoring the studies and contributing to what the Orange County Register called in a November editorial, "Sacramento's caricature of bumbling, well-intentioned, paternalistic nonsense".

Leadership on jobs growth emerging

California has often claimed leadership on many big issues and movements. It's time for policymakers to claim leadership where it matters most -- growing our job base. A 12.4% unemployment rate, a $20 billion state deficit, a manufacturing sector that lost more than 607,000 jobs since the decline started, and a negative 5.97 public-to-private sector job ratio since 2001 leaves California in a stranglehold of deterioration.

Both parties introduced jobs packages in the last 24 hours that indicate the Legislature is now focused on leading us out of this mess with a policy environment that at least thinks of job impacts first. Up until now, the employer, employee and unemployed communities in California were left wondering why California leads on everything but jobs and our economy.

Both parties deserve credit for working to put something together, but there are delineations in the two proposals that must be pointed out. The democrat proposal is almost solely based on government created jobs, while the republican proposal sends signals to the private sector that California will create a competitive job creation climate with reduced costs and flexible regulations. (The latter covers many of the themes in CMTA's campaign asking policymakers to understand economic and job impacts of existing and new regulations.)

An answer to the two different proposals lies in a look at California's private-public sector job ratio and Texas' job and revenue growth. According to the Bureau of Labor statistics data, for every new California government job since 2001, the state LOST 5.97 private sector jobs. That hurts ... bad. It translates into an environment that has literally picked the winner in California -- government. On the flip side, over the same nine years the Lone Star state's focus on flexible regulations and lower costs (CA is 57% higher in taxes than Texas) has given them 484,600 new private sector jobs and, consequently, the money to pay for important government services -- to the tune of a $2 billion surplus in 2009. In other words, produce the wealth first, then pay for increased government.

With a plan that cuts costs, eases regulations with flexibility, and eliminates lawsuit abuse, the Republicans understand that our recovery starts with a competitive environment for our large and small businesses.

While there are quality proposals in the democrat plan -- such as streamlining small business permitting with one-stop shops -- they rely too heavily on spending dollars we don't have to create new government programs and new government jobs. Part of their plan actually eliminates furloughs and redirects tax dollars into more public sector jobs.

The re-directed leadership is appreciated by all working families and employers in California, no doubt. Now it's just time to get it right. If we do, we just might get on the cover of Time Magazine for the leadership this state deserves.

Regulatory uncertainty is the bane of investment

Uncertainty is the bane of investment, innovation and economic growth. California's economy will not recover so long as our state consistently implements regulations without regard for negative economic consequences. I penned the following piece in today's Sacramento Bee as part of CMTA's effort to grow jobs and revenue by understanding regulatory impacts. Our goal is to create 2 million new jobs by 2020 by reviving California's golden era of economic growth and prosperity.

For all the rosy talk, California's new "green" jobs now account for less than 1 percent of the state's work force. Certainly we need these jobs and should be doing everything we can to nurture them. But pretending that they alone will pull California out of our current economic bog is naive. Growing thousands of green jobs while driving away hundreds of thousands of manufacturing jobs won't recapture our state's economic glory. We need both to reignite our economy.

California's manufacturing sector provides high-wage jobs for millions of middle-class families while generating billions of dollars in tax revenue for schools, infrastructure and other public services. But these jobs are disappearing. We aren't talking about old "smokestack" industry jobs, but aerospace, high-tech, biotech and other skilled positions that pay on average $20,000 a year more than service-sector jobs. This month, our last auto manufacturing plant is closing.

Manufacturing and other companies are leaving California or failing to expand, in large part, because of the state's notoriously expensive and uncertain regulatory environment. Businesses are afraid to invest here because the rules keep changing while the cost of compliance spirals ever higher.

"It's difficult for most employers to make a solid case for starting up or expanding a business in California," observed Trends Magazine recently. "Government regulations seem perversely aligned to discourage people from doing business there." Last year, one California company told the Legislature it had been inspected by regulators 165 times in 2008, nearly every two days, and that inspections had increased another 26 percent in 2009. Reports like this scare other companies away.

Since 2001, California has lost nearly a third of its manufacturing base, a 32 percent decline in just eight years.

The impact has been devastating: 600,000 lost jobs, $75 billion a year in lost wages and $5 billion annually in lost tax revenue, money that once helped balance the state's budget.

If we're serious about reversing California's reputation as a lousy place to do business, we need to get serious about regulatory reform. We don't need to dismantle environmental, worker or consumer protections to improve California's regulatory climate.

But we do need to remake the system so it's lean, efficient, predictable and accountable, with common-sense rules that are fairly applied. It's a smart way to begin repairing our image (and our economy) because it can be accomplished quickly and without cost. Moreover, the benefits will be felt almost immediately, as it will send a powerful message to the business world that we genuinely want their jobs and the revenue they provide. Very quickly, we'll once again be competitive with other states.

To achieve this, three things need to happen.

First, the Legislature needs to restore its authority over the state's regulatory bureaucracy. Unelected officials now have sweeping powers to impose new regulations, with no requirement that these regulations be reviewed or approved by the Legislature. This creates an uncertain and unpredictable regulatory climate that can easily be fixed by requiring legislative approval for each new regulation proposed by the bureaucracy.

Second, there needs to be a system that accurately measures the potential impact of proposed regulations on jobs and the state's economy, so informed decisions can be made about whether the benefit of a new regulation is worth the cost.

Requiring the Legislative Analyst's Office to complete an unbiased, independent economic impact report for every major regulation that's proposed will achieve this.

Third, to begin trimming California's regulatory thicket, the Legislature should review every regulation already on the books, and require periodic review for all new regulations adopted in the future. Doing so will ensure that regulations are working as intended, and rid the state of regulations that are outdated, ineffective and redundant.

Clearly, other steps must be taken to fully revive California's economy and stop the exodus of jobs and tax revenue. But regulatory reform is a good place to start because it provides tangible and immediate proof to wary investors and company decision-makers around the world that California is back in business.